With results still coming in, projections show the United Progressive Alliance is likely to win about 250 seats, making it a shoo-in to form the next government and provide continuity, a stable administration and progress on key economic and corporate reforms.

The Big Count

Counting begins 8 am Indian Standard Time; results expected by the late afternoon

Votes will be counted from all five voting days in the national parliamentary elections that were held between April 16 and May 13; voting was held in 28 states and 7 union territories.

714 million voters were eligible to vote but turnout is expected to have been about 56% nationally.

Votes will be counted by electronic counting machine under the supervision of a local election official in each constituency.

Any demand for a recount of votes made by a candidate or his counting agent after the result sheet has been completed and signed will be rejected.

May 16-17:

Intense negotiations begin between major political parties to garner the 272 votes needed to form a coalition government; no single party is expected to garner a simple majority.

May 17 onwards:

Prime Minister Manmohan Singh officially submits his resignation to President Pratibha Patil; Mr. Singh to continue as caretaker prime minister until the new government is formed.

President will invite the leader of the party with the most votes to form the government. The leader has to submit a list of 272 members and allies to prove it can form a government.

June 2 onwards:

The 15th Lok Sabha, or lower house of Parliament, will be constituted by June 2.

If no party can prove its majority by around June 15, there will be a hung parliament and a decision must be taken whether to hold another election.

The new government prepares to present the budget by June 25.

Source: Election Commission of India, Indian Parliament

Also, the UPA probably won't need the support of the Left parties, which had deserted the Manmohan Singh government in 2008 in protest against a civilian nuclear deal with the U.S.

The Left &ndash; led by the Communist Party of India (Marxist) &ndash; is likely to manage only 25 seats this time, down from about 60 in 2004.

The National Democratic Alliance, led by the right-wing Bharatiya Janata Party, is expected to get about 160 seats in India's 543-seat lower house of parliament. Final results are likely to be announced Sunday.

"The best thing is that the Left has been left behind. This is great news for the markets and we are going to see strong foreign inflows into the country", said Arun Kejriwal, founder and managing director of Kejriwal Research & Investment Services Pvt. Ltd.

Exit polls had predicted that only a few seats would separate the two major alliances &ndash; a scenario that prompted gloomy forecasts of a hung parliament that would throw up a weak, patchwork coalition.

But market players now expect the Bombay Stock Exchange's benchmark Sensitive Index to rise 800-900 points Monday as the Left is unlikely to be able to hobble key reforms &ndash; such as the opening up of the retail and banking sectors to more foreign direct investment and the sale of stakes in state-run companies.

Some players add that the initial euphoric market reaction is likely to be followed by a phase of consolidation, with the long-term direction coming from the federal budget, which is likely to be presented in July.

Five years ago, when the UPA came to power with the outside support of the Left parties, the Sensex dropped 17% over a few sessions on fears that a communist agenda would undo India's economic liberalization.

In the following years, India became one of the world's hottest investment destinations with the Sensex rising to an all-time high of 21206.77 on Jan. 10, 2008. Then it slid steadily as the world economy slumped.

But stocks have been rising of late on hopes that the Left won't be in the government: The Sensex has risen nearly 7% since the beginning of May, and more than 26% this year.

In comparison, the Dow Jones Industrial Index is down 5.8% this year and the U.K.'s FTSE 100 is nearly 2% lower.

Analysts say Indian markets have room to gain further, given an expected revival in foreign inflows and fund redeployment by domestic funds; some tip the Sensex to reach 14,000 &ndash; up from Friday's 12,173.42 close &ndash; in the next three to four months.

"Divestment and reforms will be back on track, and the government will try and close the fiscal deficit," said Vikas Khemani, co-head of institutional equities at Edelweiss Securities.

India's fiscal deficit doubled to 6% in the year ended March 31, as the government spent more to stimulate a slowing economy.

Despite the cheer, the UPA doesn't have much to show for itself on the reform front so far, mainly because of pressure from the Left parties.

Opening up of the banking sector to foreign direct investment, raising the FDI limit in insurance to 74% from 26%, and reforms to allow pension funds to invest in equity markets were some of the reforms expected but not delivered.

The only notable reform has been allowing 51% FDI in single-branded retail.

Analysts believe that things will be different this time round.

The markets will keep a close eye on issues such as the liberalization of foreign direct investment in banks, insurance firms and the retail sector, the sale of stakes in state-owned companies and the freeing up of pricing of fuel products such as gasoline and diesel.

The continuity of government comes at a crucial time.

India's economy is in a vulnerable state and the new government will have to work toward growth. The country adds 18 million to 20 million graduates to its workforce each year, and these people need to be provided with jobs, Vinay Gairola, fund advisor to the Atlantis India Opportunities Fund, said in a recent note.

India's economic growth likely slowed to 6.5% in the just-ended fiscal year, from 9% a year earlier, according to government estimates. Gross domestic product is forecast by the Reserve Bank of India to grow 6.0% in the fiscal year which began April 1.

India's capital goods and infrastructure sectors are likely to get a boost from the election outcome on hopes of a pickup in government spending, with companies such as Larsen & Toubro Ltd., Bharat Heavy Electricals Ltd. and Reliance Infrastructure Ltd. set to gain.

"We can see the government pushing for IPOs (initial public offerings) of companies such as Oil India, NHPC and BSNL (Bharat Sanchar Nigam Ltd.)," said Mr. Kejriwal of Kejriwal Research & investment Services.

But Sonal Varma, an economist at Nomura Securities, cautioned that India's widening fiscal deficit may not allow the government to continue to spend at the same pace as in the past fiscal year.

"The bulk of (any economic) stimulus will be in the first half of this fiscal year, and we will likely see it tapering off later," she added.

The Congress party is widely credited for the initiation of economic reforms in India in 1992, when the country's abysmally low foreign exchange reserves were barely enough to buy supplies for a few weeks.

With the election results, the U.S. dollar will face the heat with a possible decline to INR48.50, where the Reserve Bank of India may intervene to slow the rupee's rise and cushion exporters, said Moses Harding, head of global markets group at IndusInd Bank. The dollar last closed at INR49.38.

Yield on the benchmark 10-year bond could fall to 6.25%, an attractive level for investors to take profits.

"Any gains beyond 6.25% will be difficult to sustain given the outlook of no more rate cuts, inflation target of 4% by this fiscal year end and crude oil rising about $60/bbl," Mr. Harding said.

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